A Company That Makes Handheld Computers Is Trying to Improve

question 30

Essay

A company that makes handheld computers is trying to improve one of its poorer selling products.They conducted some customer surveys and found that customers prefer the product to weigh between 10 and 14 ounces.At present, the mean of the process is 12 ounces and the standard deviation of the process is .4 ounces.They want to ensure that the production process will meet customer expectations; that is, the process capability index (C_p) will be greater than or equal to 1.00.
a.What is the C_p of the current production process?
b.What does the standard deviation of the process have to be for the C_p to equal 1.00?

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Definitions:

Gross Investment

The total amount spent on purchasing or constructing new capital goods over a specific time period, without accounting for depreciation.

Net Investment

Net investment refers to the total amount spent on purchasing new capital minus the depreciation on existing capital, indicating the growth of a company or economy's productive capacity.

Capital Goods

Long-lasting goods acquired and used by businesses to produce other goods and services, contributing to their operational capabilities.

Gross Investment

The total amount spent on purchasing or constructing new capital assets before accounting for depreciation.